Correlation Between Coupang LLC and Quantum BioPharma

Can any of the company-specific risk be diversified away by investing in both Coupang LLC and Quantum BioPharma at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Coupang LLC and Quantum BioPharma into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Coupang LLC and Quantum BioPharma, you can compare the effects of market volatilities on Coupang LLC and Quantum BioPharma and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Coupang LLC with a short position of Quantum BioPharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coupang LLC and Quantum BioPharma.

Diversification Opportunities for Coupang LLC and Quantum BioPharma

0.59

Correlation Coefficient

Coupang LLC  Quantum BioPharma

Very weak diversification

The 3 months correlation between Coupang and Quantum is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Coupang LLC and Quantum BioPharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quantum BioPharma and Coupang LLC is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Coupang LLC are associated (or correlated) with Quantum BioPharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quantum BioPharma has no effect on the direction of Coupang LLC i.e., Coupang LLC and Quantum BioPharma go up and down completely randomly.

Pair Corralation between Coupang LLC and Quantum BioPharma

Given the investment horizon of 90 days Coupang LLC is expected to under-perform the Quantum BioPharma. But the stock apears to be less risky and, when comparing its historical volatility, Coupang LLC is 3.7 times less risky than Quantum BioPharma. The stock trades about -0.11 of its potential returns per unit of risk. The Quantum BioPharma is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  321.00  in Quantum BioPharma on October 23, 2024 and sell it today you would earn a total of  21.00  from holding Quantum BioPharma or generate 6.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Coupang LLC  vs.  Quantum BioPharma

Coupang LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Coupang LLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Quantum BioPharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quantum BioPharma has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Coupang LLC and Quantum BioPharma

The main advantage of trading using opposite Coupang LLC and Quantum BioPharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coupang LLC position performs unexpectedly, Quantum BioPharma can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Quantum BioPharma will offset losses from the drop in Quantum BioPharma's long position.

The idea behind Coupang LLC and Quantum BioPharma pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.